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Technology Stocks : OLED Universal Display Corp
OLED 121.65+0.2%5:26 PM EDTNews

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To: EvanG who wrote (14090)1/3/2018 10:18:20 AM
From: slacker7111 Recommendation

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TallDon

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UDC is a company full of scientists, many probably millionaires by now, who like designing cool stuff. Their mentality is to be the first to come up with something and crush the competition to the finish line. They are not interested in burning down the company in the short term. They want to keep their jobs to continue to make cool stuff and not just for the money.


That is a pretty harsh criticism of management then. The scientists are welcome to that viewpoint but management is supposed to run the company for shareholders.

I also vehemently disagree that setting a deadline for Samsung and threatening to stop material shipments is burning down the company. Burning down the company would be signing a series of short-term license agreements which would allow Samsung more time to pursue alternatives to UDC.

If Samsung thinks that UDC is worth 2% then they should try to buy UDC. They love monopolies. The stock should rise to prevent that from happening, hence a reason why the stock has support at these levels.


If Samsung has to shut down their factories or sign a license agreement, then UDC could command royalties much higher than 2%. UDC would be extremely difficult for Samsung to buy. There would be anti-trust issues and the stock would soar once it became known that UDC was asking for rates so far above the existing rates and that Samsung had no alternatives to signing.

The disconnect I have with some posters here is that those who think that UDC has the strongest negotiating position appear willing to settle for the lowest rate or the most forbearance while negotiations continue.

Fundamentally, I guess I disagree with the view that there is some sort of long-term gain to giving Samsung much of a break.

Slacker
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